Federal Minister for Finance and Revenue Miftah Ismail on Thursday said the pressure on the rupee would start receding from the next month with a persistent decrease in imports.
Addressing a press conference in Islamabad along with Defence Minister Khawaja Asif, Miftah said that the domestic financial markets were jolted after the Punjab Assembly by-elections on July 17 but the situation is now under control as the coalition government has resolved to complete its tenure.
The current month’s imports were less compared to the last month and the same month of the previous year, he added.
The minister observed that the fresh pressure on the rupee against the dollar is mainly due to the political turmoil as the people felt that the federal government might not stand, but when the latter made it clear that it would complete its tenure, the negative sentiments subsided immediately.
“The other issue is that last month the country’s import bill of $7.5 billion was historically high, $3.7 billion of them related to the energy sector and the rest $3.7 billion was of other goods. The pressure on the rupee is now mounting due to payments of these imports,” he added.
He said the State Bank of Pakistan (SBP) took multiple measures due to which very few letters of credit (L/Cs) were opened. “In the current month, imports will fall and further reduce in next month.”
Miftah further said that the country has storage of over 2 billion litres of diesel, which is enough for the next 60 days. “So we do not need to import it for at least one month,” he said, adding the government has also sufficient stock of furnace oil enough for the next two to three months.
Further, he added, the motor gasoline demand has also reduced after an increase in the prices of petroleum products because when petrol is cheaper, the people are hoarding in anticipation of rising in its price.
“The impact of all the above factors would be witnessed next month, with a significant decline in the demand of dollar in the banks,” the minister added.
As regards the rumours about the economy, the finance minister said that it was going in the right direction and dispelled the impression of default.
Replying to a question, the federal minister said the coalition government has no regret in taking tough economic decisions because it has risked the party’s political gains only to save the country from falling into default.
“The voters would hopefully support the government’s actions in the next election,” he added.